5 THE GLOBAL MARKET ECONOMY
5.4 The Globalisation of Organised Crime
The extent of transnational organised crime will continue to increase in the future.
238 Smadja (2000).
239 “Storm over globalisation,” The Economist, 27 November 1999, p. 15f.
The forces that have been shaping the world after the end of the Cold War have made
transnational crime and the globalisation of crime a major focus of security policy studies and threat assessment. Some of the most pessimistic analyses even describes the growth of
transnational organised crime “as a major threat, perhaps the major threat to the world system in the 1990s and beyond.”240 The rise of transnational organised crime goes further back than to the end of the Cold War, but it received a powerful impetus by the growth of the global illegal trade in drugs.
For the last three decades illegal drug trade has become the major source of income for organised crime, and it has transformed local and regional mafias into global gangs.241 They do not grow raw materials or sell the refined drugs on the street, but monopolise the refining and transport sectors. The global supplies of opium-heroin and coca-cocaine have grown dramatically over the past decades. In 1950, an estimated 500 tons of heroin were produced world-wide, in 1970 about 1,000. Global heroin production remained fairly steady during the 1970s, then increased again during the 1980s, until more than 3,500 tons were produced in 1990. In other words, between 1950 and 1990 world heroin production grew sevenfold.242 According to the UN’s Global Report on Crime and Justice, the production of illicit drugs rose sharply world-wide from the mid-1980s, the production of cocaine doubled and that of opium more than tripled during the 1990s. In 1995, the illegal drug trade was estimated at
$400 billion, about 8% of the world trade.243
There are no indisputable explanations for fluctuations in drug trade, but it seems that both anti-drug action and political events do have an impact. In 1970 Turkey produced 80% of the world’s opium. The United States exercised considerable pressure on Turkey to eradicate poppy, and Turkey’s role as the world’s premier supplier soon ended. The Islamic Revolution in Iran in 1979 led to the overthrow of the Shah and a ban on opium production and heroin use, which seriously curtailed opium production. The Soviet invasion of Afghanistan also reduced opium production somewhat. But the effects of these events were limited in time, as opium cultivation shifted to other regions, primarily the Golden Triangle (Myanmar, Laos and Thailand, which explains the increase in production in the 1980s.244 In sum, there is no doubt that both drug supplies and drug use have increased. So far, attempts at curbing the drug trade have only yielded limited or temporary results.
Transnational organised crime has also surged because of expanding business opportunities in other fields. As a result of the crackdown on illegal immigration, the illegal market of human trafficking has become the domain of sophisticated organised crime groups. Moreover, it has laid the basis for “new forms of collaboration between and across previously competitive
240 Strange (1996), p. 121.
241 Schaeffer (1997), p. 329.
242 Schaeffer (1997), p. 331.
243 Buvinić and Morrison (2000), p. 66.
244 The rising drug supplies then led to a drop in street prices and increasing purity, which made it economical to develop cheap kinds of drugs that can expand consumer demand in new ways. This process occurred first with cocaine, more recently with heroin. See Schaeffer (1997), pp. 329ff.
organised crime groups. As Margaret Beare writes in a recent study on human trafficking, a smuggling ring in China involved Triad members working together as partners with Japanese Yakuza. Similarly, Chinese Triad members have teamed up with Italian Mafia members to smuggle foreigners into Italy and Europe.245 Finally, expanding networks of transnational and transregional trade patterns appear to have paved the way for global trafficking in guns and small arms. Although few reliable figures on illegal trafficking of light weapons exist, anecdotal evidence suggests that it is a growing business. 246
The reasons for the recent surge in transnational organised crime are complex. According to Manuel Castells, global crime is “a fundamental actor in the economy and society of the Information Age.”247 It has become easier to move people, commodities and capital from country to country. Information can be transferred and obtained with fewer obstacles and at a higher pace than ever before. A transnational economy with deregulated financial markets and free trade is being promoted and enforced. A global market is developing for an increasing number of products. States are becoming increasingly interdependent, and they have less and less control over transnational activities of non-state actors.
These trends affect all kinds of activity, including crime. Willetts has observed that “the operations of criminals and other non-legitimate groups have become more complex, spread over a wider geographical area and increased in scale, because improvements in
communications have made it so much easier to transfer people, money and weapons and ideas on a transnational basis.”248 And perpetrators would seem to be at an advantage, since law makers and enforcers of laws and regulations will be at least one step behind a criminal community that is unrestrained by democratic procedures. Pessimists such as Susan Strange argue that the chances of an efficient international regime to counter transnational crime are likely to be poor. It would require “far more co-operation and co-ordination between national police and enforcement agencies than either Interpol or high-level ministerial conferences have so far been able to achieve.”249
Other reasons for the surge in transnational organised crime may be found in the hapless economic conditions in many of the former communist countries. They have been largely unable to create sustainable economic growth at home. In an environment of low profitability of legal business and insufficient legal mechanisms in place to protect legal investments, organised crime is set to thrive. The situation in the Russian Federation is a particular source of concern. There have long been fears of increased trafficking of commodities that would create an obvious security risk, first and foremost as nuclear material. While Russian officials argue that they largely contain illegal trafficking in nuclear material, reports from other ex-Communist states still point to the availability of sensitive biological, chemical and nuclear
245 Beare (1997), p. 38.
246 Buvinić and Morrison (2000), pp. 66-67 For a recent article on clandestine arms trade, see Young (2000).
247 Castells (1996c), p. 180.
248 Willetts (1999), p. 298.
249 Strange (1996), p. 121.
material on the illegal market.250 The Russian Ministry of the Interior’s annual report from 1999 expects that the current growth rate in organised crime in Russia will not be
significantly reduced, even under more favourable circumstances than today (for example if there were to be economic growth and an improvement in living standards).251
Regarding the illegal drug industry, the Russian Ministry of the Interior expects that drug trade will become an even more important part of Russian organised crime. According to a recent report by Russia’s Ministry of the Interior and the UN Office for Drug Control and Crime Prevention, there has been “an avalanche of growth of smuggling of narcotics and psychotropic substances” in recent years. Within recent years, Russia has become a target for expansion by international drug traffickers. Over half of all narcotic substances seized in the country have foreign origin. Drug dealing has become one of the most lucrative criminal activities.”252 Interviews with Russian officials in Interpol in Moscow also reveal that Russian crime fighting organs primarily hope that they will be able to limit the growth rate of
organised crime, and prevent its expansion to new spheres, rather than bring about an actual reduction in organised crime.253
In addition to the prospects for further growth in organised crime in Russia, demographic trends in a number of countries in the developing world are also expected to influence the crime rate negatively, such as the increasing urbanisation and accompanying process of dissolution of traditional structures of social control. Finally, the emergence of new types of conflict in the post-Cold War era may lead to growth in transnational crime.254 It is argued that internal conflicts today are less characterised by ideology and increasingly dominated by war lords with local horizons and leaders aiming to accumulate wealth for redistribution to followers, loyalists and clients rather than seeking to implement a political programme for a state. This new war economy feeds on new transnational parallel trade and illegal trafficking.
Goodhand and Hulme for example interpret these conflicts not as events, but as processes with no discernible start or end. 255 Duffield argues that such protracted conflicts are symptomatic of new and expanding forms of political economy. Today’s conflicts are characterised by long-term and innovative adaptation to globalisation, linked to expanding networks of parallel and grey economic activity.256
5.4.1 The New Bedfellows of Organised Crime and Political Violence
Theoretical and empirical literature on the relationship between transnational organised crime and terrorism strongly suggest that the two phenomena, albeit still relatively distinct despite a trend towards convergence, frequently correlate and reinforce one another. As we have seen, a
250 Personal conversation with security official from a former Soviet republic.September 1999.
251 Russia’s Ministry of the Interior (MVD) (1999).
252 Russia’s Ministry of the Interior (MVD) and the UN Office for Drug Control and Crime Prevention (1999), cited in Andrésen (2000), p. 7.
253 Andrésen (2000), p. 8.
254 See previous chapter of the future of conflict.
255 Goodhand and Hulme (1999).
256 Duffield (1999).
continued growth of transnational organised crime appears to be very likely in the near future, although regional differences may be significant. Europe’s eastern and south-eastern
periphery appears to be exposed to further growth in organised crime. In sum, increased levels of the types of terrorism in which political and economic motives are difficult to distinguish, may then be expected in those areas.